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a. RAK Ceramic is currently paying dividend Tk. 3.70 per share, which is expected to grow at a constant rate per year. Investors required

 

a. RAK Ceramic is currently paying dividend Tk. 3.70 per share, which is expected to grow at a constant rate per year. Investors required rate of return is 18 percent. Calculate the price of the stock based on average growth of the stock, and justify your findings to take stock investment decisions. (CMP=77.50 TK.) Year 2014 2015 2016 2017 2018 2019 Dividend per share 3.25 Tk. 3.65 Tk. 3.95 Tk. 4.25 Tk. 5.30 TK. 4.40 TK. Growth rate b. Explain different types of common stocks with basic features in light of BD stock market and major challenges of DSE to build up investors' confidence. c. Briefly explain the steps in capital budgeting decision making process with constraints of implementation stage.

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a To calculate the price of the stock based on average growth we can use the Gordon Growth Model also known as the Dividend Discount Model which calculates the present value of all expected future div... blur-text-image

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